Unfair and ‘Invalid’ Dismissal
By Brian O'Shea, Special Counsel, Peak Services
As part of their role and responsibility, a council’s chief executive officer may take disciplinary action against an employee where he or she is satisfied the employee has:
- failed to perform their responsibilities under the Local Government Act 2009 (“LG Act”).
- failed to perform a responsibility under the LG Act in accordance with the local government principles; or
- acted in a way that is not consistent with the local government principles under the LG Act.
Disciplinary action may include:
- demotion including a reduction in remuneration.
- a deduction from salary or wages of an amount of not more than two penalty units; or
- a written reprimand or warning.
Where dismissal is proposed, extra care must be taken to avoid the risk of an unfair dismissal claim being brought against the council. Any dismissal must comply with the requirements that apply to the local government employee under the Industrial Relations Act 2016 (“IR Act”).
A dismissal will be unfair if it is considered harsh, unjust or unreasonable.
A dismissal may be:
- harsh – if the punishment does not fit the crime (the outcome was disproportionate when considering the misconduct of the employee).
- unjust – if the employee was not guilty of the alleged misconduct; or
- unreasonable – if the evidence before the employer did not support a conclusion that the employee ought to be dismissed.
A dismissal will be harsh, unjust or unreasonable if there is no valid reason for the dismissal. A valid reason for dismissal may relate to an employee’s conduct, capacity or performance. The reason must be sound and well-founded, not fickle, fanciful or prejudiced.
What is considered harsh, unjust or unreasonable will depend on the facts of each case. In deciding whether a dismissal was harsh, unjust or unreasonable, the Queensland Industrial Relations Commission (“the Commission”) must consider:
- whether the employee was notified of the reason for dismissal; and
- whether the dismissal related to:
- the operational requirements of the employer’s undertaking, establishment, or service; or
- the employee’s conduct, capacity or performance; and
- if the dismissal relates to the employee’s conduct, capacity or performance—
- whether the employee had been warned about the conduct, capacity or performance; or
- whether the employee was given an opportunity to respond to the claim about the conduct, capacity or performance; and
- any other matters the commission considers relevant.
If an employee claims they were unfairly dismissed, then they may apply to the commission to be reinstated to their position or to be re-employed in another position that the employer has available. In the alternative, the employee may seek compensation if, and only if, the Commission considers reinstatement or re-employment would be impracticable.
The object of compensation is to restore the employee as far as practicable to the financial position in which he or she would have been but for the unfair dismissal. Any compensation awarded by the Commission must not be more than six months wages (if the employee was employed under an industrial instrument) or the lesser of not more than six months and an amount equal to half the amount of the high-income threshold (if the employee was not employed under an industrial instrument). The high-income threshold is currently $158,500.
Where council dismisses an employee without affording them an opportunity to respond to allegations made against them, as required under Reg. 283 of the Local Government Regulation 2012 (LG Regulation), as an alternate to seeking an order that a dismissal was harsh, unjust or unreasonable (i.e. unfair dismissal), a number of Commission decisions have confirmed that it is open for the Commission, on application by an affected employee or relevant union, to make a declaration under s.463(1) of the IR Act that the dismissal is invalid and consequently the employee is deemed to be still an employee of the council. This means the employee, in such circumstances, will be entitled to backpay of all unpaid wages as well as entitlements and, in addition council must either restore the employee to their position before they were invalidly dismissed or, if that is not possible, appoint the employee in another suitable position that the employer has available.
For council, such scenarios would likely be highly undesirable outcomes, given a decision to dismiss an employee may relate to poor performance and/or there has been conduct that is likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee such that reinstatement or re-employment is not considered an option.
In those circumstances, it always remains open of course for council to recommence the disciplinary process – but this potentially exposes council to an adverse action claim being brought against it on the basis that an employee may seek to allege that the recommencement of any disciplinary process was taken against the employee because he or she exercised a workplace right.
It is therefore critical for council to get it right in the first instance when undertaking a disciplinary process against employees to avoid making what could turn out to be an expensive mistake. For the sake of ensuring compliance, and avoiding potentially costly and lengthy litigation, it is recommended council seeks appropriate legal advice before undertaking any disciplinary process.